20

Suppose that the demand and supply schedules for rental apartments in the city of Gotham are as given in the following table Monthly Rent $ 2,500 2.000 1,500 1,000 500 Apartments Demanded 12,500 15,000 17.500 20,000 22,500 Apartments Supplied 17,500 15,000 12,500 10,000 7.500 Instructions: Enter your answers as a whole number a. What is the market equilibrium rental price per month and the market equilibrium number of apartments demanded and supplied Market equilibrium rental price = $ Market equilibrium quantity apartments b. If the local government can enforce a rent-control law that sets the maximum monthly rent at $1.500, will there be a surplus or a shortage? Shortage Of how many units? apartments per month How many units will actually be rented each month? apartments c. Suppose that a new government is elected that wants to keep out the poor. It declares that the minimum rent that landlords can charge is $2,500 per month. If the government can enforce that price floor, will there be a surplus or a shortage? (Click to select) Of how many units? apartments per month And how many units will actually be rented each month? apartments